G.R. No. 117359 July 23, 1998
PANGANIBAN, J
Lessons Applicable: tax exemption should be construed strictissimi juris against the grantee, equity is not a ground for tax exemption
Laws Applicable:
FACTS:
- Davao Gulf Lumber Corporation, a licensed forest concessionaire possessing a Timber License Agreement granted by the Ministry of Natural Resources (Now DENR), purchased from various oil companies refined and manufactured oils as well as motor and diesel fuels for its exploitation and operation.
- Selling companies paid and passed the specific taxes imposed under Sec. 153 and 156 of the 1997 NIRC to petitioner as purchaser who in turn filed before CIR a Claim for Refund for P120, 825 representing 25% of the specific taxes actually paid based on Insular Lumber Co. v. CTA and Sec. 5 of RA 1435 and complied with its procedure.
- Then, petitioner filed before CA a Petition for Review: Favored petitioner to a partial refund P2,923 (excluding those that have prescribed) and based on the rates deemed paid under RA 1435 (NOT higher rates actually paid under the NIRC)
- Insisting that the basis be the higher rate, petitioner elevated the case to the CTA who affirmed the CA's decision
HELD: NO. A tax cannot be imposed unless it is supported by the clear and express language of a statute; On the other hand, once the tax is unquestionably imposed, a claim of exemption from tax payments must be clearly shown and based on language in the law too plain to be mistaken. Section 5, RA 1435 as a tax exemption, must be construed strictissimi juris against the grantee.
- Supported by CIR v. CA and Atlas Co., CIR v. Rio Tuba Nickel Mining Corp. and Insular Lumber Co. - all cases where purchases was made BEFORE 1997 NIRC is in effect.
- According to an eminent authority on taxation, there is no tax exemption solely on the ground of equity